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MYR

Firmer Start

FOREX

AUD Leads G10 Pack, Volatility Subdued

US TSYS

Marginally Cheaper Early On

AUSSIE BONDS

YM Nudges Lower On Lack Of YCT Purchases

RBA

ACGB Purchase Offer Details

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The holiday in Tokyo limited USD/JPY to a sub-20 pip range overnight, with the rate last dealing at virtually unchanged levels, just above Y109.90.

  • Caution re: China Evergrande left both legs of the cross towards the top of the G10 FX table during Asia-Pac dealing, with the worries on that front well-documented and the latest developments covered elsewhere.
  • This comes after USD outperformance allowed the rate to show above Y110.00 on Friday, although much like today's Asia-Pac session, the move was shallow and limited.
  • Political matters continue to dominate the local newswires, with Taro Kono the clear favourite to assume LDP Party leadership, per a Kyodo poll covering party members and supporters. Although it isn't a one horse race by any means, with a Mainichi poll covering the views of LDP MPs showing that particular group favours Fumio Kishida ahead of the upcoming leadership election.
  • Initial support is located at the Aug 16/Sep 15 low (Y109.11). Initial firm resistance is seen at the Sep 8 & Aug 13 highs (Y110.45/46), a break above there would expose the Aug 11 high and key resistance (Y110.80)
  • Broader risk dynamics and the London/NY reaction to Evergrande matters will likely shape trade in the pair on Monday. Note that the S&P 500 e-mini contract is trading below its 50- & 55-DMAs (there hasn't been a close below those DMAs since March of this year).